ARA Oil Product Stocks Edge Lower

The total volume of oil products held independently in storage in the Amsterdam-Rotterdam-Antwerp (ARA) area edged lower during the week to 4 March, according to the latest data from consultancy Insights Global.

Overall oil products stocks fell on the week. The small drop came as a sharp draw in fuel oil stocks was largely balanced out by rises in inventories of all other products.

Independently-held fuel oil stocks in ARA fell on the week according to Insights Global, reaching their lowest since December. Fuel oil tankers entered ARA storage from Russia — the world’s principal exporter of high-sulphur fuel oil — the Baltic states, the UK and the US. Production of fuel oil is increasing in Europe, which combined with a sharp drop in demand following the coronavirus outbreak, has pressured prices lower. EU-16 output was at its highest since April 2019 in January. Fuel oil was taken out of ARA storage for deliveries to destinations east of Suez, including the Mideast Gulf and Singapore, but it was unclear which grades of fuel oil were being exported.

Gasoil stocks rose on the week, ticking up slightly from last week’s one-year low. Gasoil was imported into ARA storage from Russia principally, after loadings from the Baltic Sea port of Primorsk were scheduled at five-year highs for the second consecutive month in February. Gasoil departed ARA storage for France — on sea-going vessels and barges up the Rhine — the UK and west Africa. Sharply lower diesel prices could have attracted buyers back to the market in northwest Europe.

Gasoline inventories rose on the week, reaching their firmest since mid-February. Gasoline was exported to Canada and the US this week, and to west Africa. Westbound exports probably rose amid favourable economics for transatlantic shipments, with Nymex Rbob trading above Eurobob gasoline in the week to 28 February. Gasoline entered ARA tanks from France, Norway, and the UK.

A gain in ARA naphtha inventories was registered. Naphtha arrived from Norway, Russia and the UK. Another naphtha cargo was exported from ARA storage to Italy. The Nord Gardenia departed Rotterdam for the Sarroch refinery in Sardinia. The refinery is undergoing maintenance on some units used in gasoline production. The Nord Gardenia‘s cargo is probably heavy naphtha for using as a gasoline blending component. The light naphtha that comprises the bulk of European trading typically flows in the opposite direction, making the flow relatively unusual.

The LR2 tanker Lyric Camellia delivered jet fuel to ARA in the week to 4 March, having loaded its cargo back in February from Tarragona, Spain. That would be the first Tarragona jet fuel loading in at least four years, according to oil analytics firm Vortexa. The fixture is probably a result of more competitive freight rates in the region and discounts of Mediterranean jet fuel to those in northwest Europe, opening an arbitrage route. Jet stocks in ARA rose on the week following the import from Spain and no exports, as demand remains poor in the region given a slew of flight cancellations in Europe.

Reporter: Robert Harvey

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